Competitive Strategy
Test Questions
Course Introduction
Competitive Strategy explores the frameworks and analytical tools that firms use to achieve and sustain competitive advantage in various industries. The course examines concepts such as industry analysis, the value chain, differentiation, cost leadership, market positioning, and game theory. Through the study of real-world cases and strategic decision-making models, students learn how to identify competitive forces, anticipate competitor moves, and formulate strategies that align with organizational goals in dynamic marketplaces. By the end of the course, participants will be equipped with practical approaches to designing effective strategies for long-term success.
Recommended Textbook
Strategic Management Concepts 3rd Edition by Frank Rothaermel
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12 Chapters
1319 Verified Questions
1319 Flashcards
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Page 2
Chapter 1: What Is Strategy
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of the following is an implication of all firms in an industry pursuing a low-cost position through application of competitive benchmarking?
A) No firm would face direct competition from others in the industry; hence, profit potential would be high.
B) Each firm would be catering to a different customer segment.
C) The firms would eventually have no resources to invest in product and process improvements.
D) Each firm would be in a better position to gain a competitive advantage.
Answer: C
Q2) Which of the following is an example of a firm's external stakeholder?
A) employees
B) customers
C) shareholders
D) board members
Answer: B
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Page 3
Chapter 2: Strategic Leadership: Managing the Strategy Process
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) White Leo Autos manufactures and markets four different cars: Leo Sport,Leo Prestige,Leo Spark,and Leo Ease.These four product variants are operated as individual business units.While the product leaders of Leo Sport,Leo Prestige,and Leo Spark have adopted a differentiation strategy to attract the niche market: the product leader of Leo Ease follows a cost-leadership strategy to suit the mass market.This decision of the product leader of Leo Ease can be ideally categorized as a _____ strategy.
A) corporate
B) functional
C) business
D) tactical
Answer: C
Q2) Unrealized strategy is when parts of a firm's intended strategy is
A) nonfunctional due to unexpected events.
B) not revealed to the lower-level employees.
C) implemented and controlled by front-line employees.
D) planned to tackle some unforeseen events.
Answer: A
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) How did Virgin America enter the airline industry despite the industry's notoriously low profitability?
A) Virgin America offered average-cost service between small and large metropolitan cities in the American West.
B) Virgin America offered average-cost service between major metropolitan cities along the American East Coast.
C) Virgin America offered low-cost service between small and large metropolitan cities in the American South.
D) Virgin America offered low-cost service between major metropolitan cities on the American East and West coasts.
Answer: D
Q2) Which of the following do the sociocultural forces in a firm's external environment best represent?
A) the interest rates prevalent in an economy
B) the laws protecting small enterprises in a nation
C) the family size of the firm's target market
D) the rate of employee attrition within the firm
Answer: C
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Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Juanita,a manager at a multinational organization,is trying to carefully scan and link the firm's internal environment to its external environment.The insights from this analysis will allow her to effectively leverage the company's internal strengths to exploit external opportunities,while mitigating internal weaknesses and external threats.In this scenario,which of the following managerial tools is Juanita employing?
A) Blake Mouton managerial grid
B) Ansoff's matrix
C) BCG analysis
D) SWOT analysis
Q2) If Finolo and Ethver,companies that manufacture televisions,develop the same customer knowledge base and create products that provide the same customer appeal as Invoro,a market leader in consumer electronics,then
A) Finolo and Ethver will have a VRIO resource.
B) Invoro will have a resource that is valuable but no longer rare.
C) Invoro will have a sustainable competitive advantage in the industry.
D) Invoro will have a resource that is rare but no longer valuable.
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Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of the following statements is true of accounting data?
A) Accounting data focus mainly on intangible assets, rather than tangible assets.
B) Accounting data are historical data and thus backward-looking.
C) Accounting data do not have to be adjusted in any manner to compare companies with different capital structures.
D) Accounting data consider off-balance sheet items, such as pension obligations of a firm.
Q2) The tenet behind the triple-bottom-line is that
A) a firm should solely focus on increasing the economic value created to/for its customers.
B) a firm's primary objective should be increasing the total returns to its shareholders.
C) a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.
D) a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue.
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Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) As it takes less and less time to produce the same output,learning curves usually A) go up.
B) go down.
C) stay the same.
D) fluctuate.
Q2) When a blue ocean strategy goes bad,a firm has neither a clear differentiation nor a clear cost-leadership profile.This situation is referred to as
A) stuck in the middle.
B) buried at the bottom.
C) burned at the top.
D) caught in the transition.
Q3) To be cost-competitive,a firm should A) position itself below the productivity frontier.
B) operate at the minimum efficient scale.
C) attain the highest cost position.
D) avoid moving on to a steeper experience curve.
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Chapter 7: Business Strategy: Innovation and Entrepreneurship
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Why is it easier for new entrants to involve in radical innovations when compared to incumbent firms?
A) Unlike incumbent firms, new entrants do not have to face the high entry barriers, initially.
B) New entrants are embedded in an innovation ecosystem, while incumbent firms are not.
C) Unlike incumbent firms, new entrants do not have formal organizational structures and processes.
D) Incumbent firms do not have the advantages of network effects that new entrants have.
Q2) NextDoor is an instant messaging application for smartphones.New smartphone users find it easier to connect with friends and relatives through this mobile app when compared to other similar instant messaging applications.Hence,it has the largest user base in the industry.Thus,NextDoor app's value has increased primarily due to its
A) learning curve effects.
B) economies of scale.
C) economies of scope.
D) network effects.
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Fantastica Industries,a U.S.-based large conglomerate,competes in the hospitality,education,telecommunications,entertainment,airlines,and chemical industries.It currently operates in about 30 nations,and is planning to expand its portfolio by investing in rapidly developing countries.Which of the following strategies is Fantastica Industries pursuing?
A) zone pricing
B) niche marketing
C) product-market diversification strategy
D) process diversification strategy
Q2) BM Goods Inc.is a large conglomerate that operates only in its home country.The company competes in industries like the consumer electronics,health care,hotel,airlines,education,and steel industries.Which of the following diversification strategies does this best illustrate?
A) process diversification
B) product diversification
C) geographic diversification
D) market diversification
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers and Acquisitions
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of the following is the best definition of a complementary asset?
A) an asset a firm needs to complete the value chain from upstream innovation to downstream commercialization
B) an asset a firm would like to add to its portfolio even though it is not vital to the running of the company
C) an asset a firm can use to attract a potential joint venture partner
D) an asset a firm keeps because it helps them maintain a strong image for marketing
Q2) In Eli Lilly's Office of Alliance Management,the alliance champion is primarily responsible for
A) making sure that an alliance fits within the firm's existing alliance portfolio and corporate-level strategy.
B) providing technical expertise and knowledge needed for the specific technical area in an alliance.
C) providing alliance training and development, as well as diagnostic tools.
D) serving as an alliance process resource and business integrator between the two alliance partners.
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11
Chapter 10: Global Strategy: Competing Around the World
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of the following has been a key driver for firms to expand globally during the Globalization 3.0 stage?
A) benefits from lower labor costs in manufacturing and services
B) access to low-cost raw materials such as lumber and iron ore
C) low levels of economic growth in emerging economies
D) inefficient infrastructure in countries like China, which have brought down setting-up costs
Q2) Under the CAGE distance framework,the administrative and political distance between two countries primarily increases with A) differences in climates and time zones.
B) the absence of a trading bloc.
C) physical remoteness.
D) the lack of connective ethnic and social networks.
Q3) The risk of intellectual property appropriation increases when companies follow a multidomestic strategy because products are
A) difficult to differentiate.
B) complex to produce.
C) exported long distances.
D) manufactured locally.
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Page 12
Chapter 11: Organizational Design: Structure, Culture, and Control
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110 Flashcards
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Sample Questions
Q1) An organization is characterized as having a flexible division of labor,distributed decision making,and generalized knowledge of how to accomplish strategic goals valued.This organization is most likely _____ in nature.
A) specialized
B) organic
C) mechanistic
D) formalized
Q2) While working a night job at a call center,Carlos creates an app called DineSmart,which can be used to place orders at restaurants,rate the restaurants,and make reservations.Because he receives good responses for his app,he quits his current job to focus his efforts on DineSmart.He creates a start-up called TYOP and hires three people to help him improve DineSmart and maintain the servers that run it.In this scenario,TYOP most likely has a _____ structure.
A) simple
B) matrix
C) mechanistic
D) functional
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13
Chapter 12: Corporate Governance and Business Ethics
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110 Flashcards
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Sample Questions
Q1) Which of the following positions is an example of an inside director for a firm?
A) a senior consultant who is not an employee
B) a chief financial officer
C) a board member who is not an employee
D) a middle manager
Q2) Grameen Bank in Bangladesh was founded to provide microcredit to impoverished farmers who wanted to start their own entrepreneurial ventures that would help themselves climb out of poverty.This best exemplifies Michael Porter's suggestion that A) managers need to keep economic needs and societal needs disconnected from each other.
B) a firm should expand its internal value chain to include nontraditional partners.
C) businesses should focus on creating regional clusters such as Silicon Valley in the U.S. D) the largest but poorest socioeconomic group can yield significant business opportunities.
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